Scary October start for stocks; Russell in correction

U.S. stocks declined sharply on Wednesday, with the fourth quarter starting off on a dour note after the S&P 500's seventh quarterly gain, as investors fretted global concerns, mixed U.S. economic data and earnings ahead.

Benchmark indexes posted their worst beginning to October since 2011 as investors sought safety in U.S. Treasury bonds and gold,with the CBOE Volatility Index, a measure of investor uncertainty, rising. The Russell 2000 fell into correction territory, down 10 percent from its July record.

"In the here and now, there are too many global-macro concerns for investors to have confidence," said Art Hogan, chief market strategist at Wunderlich Securities, listing worries about ISIS, Ukraine and Russia, the slowdown in China "and ebola, which is causing things like airline stocks to go down."

"As we sit on the eve of earnings season, and we had a bunch of weaker economic data today, and as you look at continued weakness in Europe, there is concern of does it bleed into earnings. It raises some doubt for investors as to what the earnings picture will look like," said Jim Dunigan, managing executive, investments, at PNC Wealth Management.

"It's hard to get constructive with headlines of airstrikes in different parts of the world, so there are some doubts about what the economic environment looks like, particularly as we end the asset-purchase program," said PNC's Dunigan, referring to the Federal Reserve's bond buys, which are on track to conclude later this month.

On Tuesday, U.S. stocks fell, with equities posting September losses and quarterly gains, as portfolio managers engaged in end-of-quarter positioning.

"There's obviously been a fairly quick reversal in terms of sentiment, a lot of people are pointing to ebola, a slight weakening in data, the decline in energy. You could find 100 reasons for it. What drives stock prices is earnings, and the ultimate path for stocks is higher," said Dan Greenhaus, chief global strategist at BTIG.